February 20, 20263 min read
This is one of the most useful questions to answer early in the mortgage process. An insured mortgage is protected by mortgage default insurance for the lender. An uninsured mortgage does not have that insurance coverage, although lenders may use other funding structures behind the scenes.
The factors that change the answer
Here is what matters most:
- High-ratio purchases with less than 20% down generally require mortgage default insurance when eligible.
- Conventional purchases with 20% or more down normally do not require borrower-paid default insurance.
- Insured mortgages are subject to insurer rules and a purchase-price cap, currently $1.5 million for government-backed insured mortgages.
- Rates, amortization options and qualification can differ between insured and uninsured products.
The right comparison includes premium, interest rate, down payment, amortization and flexibility.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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